Exam Details
| Subject | financial management | |
| Paper | ||
| Exam / Course | mba | |
| Department | ||
| Organization | solapur university | |
| Position | ||
| Exam Date | 27, November, 2018 | |
| City, State | maharashtra, solapur |
Question Paper
M.B.A. (Part (Semester II) (New CBCS) Examination, 2018
Paper X Financial Management
Day and Date Tuesday, 27-11-2018 Max. Marks 70
Time 2.30 p.m. to 5.00 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No. 4.
Attempt any two questions from Q. No. 5 to Q. No. 7.
Figures to the right indicate full marks.
1. Case study 14
ABC Company is planning to buy equipment that had two alternatives A and B.
Each equipment requires an initial investment of Rs. 30,000. From the following
information you are required suggest the most suitable project as per
Pay Back Period.
NPV 12% Discounting Factor.
PI.
Discounted Pay Back Period.
IRR.
Year CFAT Project A CFAT Project B
1 10,500 3,000
2 8,000 6,000
3 6,000 8,000
4 7,500 12,000
5 12,000 18,000
2. Attempt (any 14
Mr. Ramprakash wishes to determine the present value of the annuity
consisting of cashflows of Rs. 40,000 per annum for 6 years. The rate of
interest he can earn from his investment is 10%.
XYZ Real Estate agency has rented out one of their apartment for 5 years at
an annual rent of Rs. 6,00,000 to be paid in the beginning of the year, with the
stipulation that rent will be increased by in every year. If agency's required
rate of return is 14% what is the present value of expected (annuity) rent
Finance and related disciplines.
Seat
No. Set P
Set P
SLR-CL 11 *SLRCL11*
3. Attempt (any 14
The following is the Balance Sheet of a company as on 31st March.
Liabilities Rs. Assets Rs.
Share Capital 2,00,000 Land and Buildings 1,40,000
Profit and Loss 30,000 Plant and Machinery 3,50,000
General Reserve 40,000 Stock 2,00,000
12% Debentures 4,20,000 Debtors 1,00,000
Creditors 1,00,000 Bills Receivable 10,000
Bills Payable 50,000 Cash Bank 40,000
8,40,000 8,40,000
Calculate
Current ratio
Quick ratio
Inventory to working capital
Debt to equity
Proprietor ratio
Capital gearing ratio
Current assets to fixed assets ratio.
Calculate Current Assets, Current Liabilities, Liquid Assets and Stock from
the following information
• Current ratio 2.5
• Liquid ratio 1.5
• Working capital 5,00,000
• Bank Overdraft 50,000
Venture capital.
4. Attempt (any 14
Functions and role of finance manager.
Advantages of ratio analysis.
Bonus shares.
Set P
*SLRCL11* SLR-CL 11
5. A company has 10% perpetual debt of Rs. 1,00,000 of Rs. 100 each. The
tax rate 35%. Determine cost of debt after tax if the debentures are issued
at 10% premium at floatation cost of 5%.
A company issues 11% irredeemable preference shares of the face value of
Rs. 100 worth Rs. 3,00,000 each floatation cost issued at 10% discount.
Calculate cost of preference share capital.
The present book value of equity shares of the company is Rs. 2,50,000.
Number of equity shares 25,000. A firm is currently earning Rs. 2,50,000
and its share is selling in the market for Rs. 90. Compute cost of equity.
Calculate Weighted Average Cost of Capital on the basis of book value and
specific cost calculated above. 14
6. The following data relates to the financial statements of RCK Ltd. for the year
ended 31st March, 2016.
• Current ratio 3 1
• Acid test ratio 1.5 1
• Quick assets Rs. 30,000
• Inventory turnover 10 times
• Fixed assets Shareholders equity 0.875 1
• Total operating expenses to sales 90%
• Number of shares of Rs. 10 each, 25,000
• EPS Rs. 2
• Gross profit ratio 20%
• Creditors velocity 27 times
• Debt collection period 12 days
• Earning for the year as percentage of share capital 25%
Closing stock Rs. 6,000 lower than opening stock. There are no bank overdraft,
prepaid expenses, long term liabilities and intangible assets. Prepare Profit
Loss for the year ended 31st March, 2016 and Balance Sheet as on same date.
Assume 360 days in a year. 14
7. Define dividend policy. Explain the various factors affecting dividend policy. 14
Paper X Financial Management
Day and Date Tuesday, 27-11-2018 Max. Marks 70
Time 2.30 p.m. to 5.00 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No. 4.
Attempt any two questions from Q. No. 5 to Q. No. 7.
Figures to the right indicate full marks.
1. Case study 14
ABC Company is planning to buy equipment that had two alternatives A and B.
Each equipment requires an initial investment of Rs. 30,000. From the following
information you are required suggest the most suitable project as per
Pay Back Period.
NPV 12% Discounting Factor.
PI.
Discounted Pay Back Period.
IRR.
Year CFAT Project A CFAT Project B
1 10,500 3,000
2 8,000 6,000
3 6,000 8,000
4 7,500 12,000
5 12,000 18,000
2. Attempt (any 14
Mr. Ramprakash wishes to determine the present value of the annuity
consisting of cashflows of Rs. 40,000 per annum for 6 years. The rate of
interest he can earn from his investment is 10%.
XYZ Real Estate agency has rented out one of their apartment for 5 years at
an annual rent of Rs. 6,00,000 to be paid in the beginning of the year, with the
stipulation that rent will be increased by in every year. If agency's required
rate of return is 14% what is the present value of expected (annuity) rent
Finance and related disciplines.
Seat
No. Set P
Set P
SLR-CL 11 *SLRCL11*
3. Attempt (any 14
The following is the Balance Sheet of a company as on 31st March.
Liabilities Rs. Assets Rs.
Share Capital 2,00,000 Land and Buildings 1,40,000
Profit and Loss 30,000 Plant and Machinery 3,50,000
General Reserve 40,000 Stock 2,00,000
12% Debentures 4,20,000 Debtors 1,00,000
Creditors 1,00,000 Bills Receivable 10,000
Bills Payable 50,000 Cash Bank 40,000
8,40,000 8,40,000
Calculate
Current ratio
Quick ratio
Inventory to working capital
Debt to equity
Proprietor ratio
Capital gearing ratio
Current assets to fixed assets ratio.
Calculate Current Assets, Current Liabilities, Liquid Assets and Stock from
the following information
• Current ratio 2.5
• Liquid ratio 1.5
• Working capital 5,00,000
• Bank Overdraft 50,000
Venture capital.
4. Attempt (any 14
Functions and role of finance manager.
Advantages of ratio analysis.
Bonus shares.
Set P
*SLRCL11* SLR-CL 11
5. A company has 10% perpetual debt of Rs. 1,00,000 of Rs. 100 each. The
tax rate 35%. Determine cost of debt after tax if the debentures are issued
at 10% premium at floatation cost of 5%.
A company issues 11% irredeemable preference shares of the face value of
Rs. 100 worth Rs. 3,00,000 each floatation cost issued at 10% discount.
Calculate cost of preference share capital.
The present book value of equity shares of the company is Rs. 2,50,000.
Number of equity shares 25,000. A firm is currently earning Rs. 2,50,000
and its share is selling in the market for Rs. 90. Compute cost of equity.
Calculate Weighted Average Cost of Capital on the basis of book value and
specific cost calculated above. 14
6. The following data relates to the financial statements of RCK Ltd. for the year
ended 31st March, 2016.
• Current ratio 3 1
• Acid test ratio 1.5 1
• Quick assets Rs. 30,000
• Inventory turnover 10 times
• Fixed assets Shareholders equity 0.875 1
• Total operating expenses to sales 90%
• Number of shares of Rs. 10 each, 25,000
• EPS Rs. 2
• Gross profit ratio 20%
• Creditors velocity 27 times
• Debt collection period 12 days
• Earning for the year as percentage of share capital 25%
Closing stock Rs. 6,000 lower than opening stock. There are no bank overdraft,
prepaid expenses, long term liabilities and intangible assets. Prepare Profit
Loss for the year ended 31st March, 2016 and Balance Sheet as on same date.
Assume 360 days in a year. 14
7. Define dividend policy. Explain the various factors affecting dividend policy. 14
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